Commissioners balk at higher county Medicaid tax

Feb. 27--A bill that would require counties to impose the equivalent of an addition 1/16th of a cent gross receipts tax to pay for the growing costs of the state's Medicaid program amounts to the state slapping the growing burden of indigent medical care on the backs of its counties, a local official contends.

Officials with the New Mexico Association of Counties wrote a letter opposing House Bill 490 introduced by Republican Jimmie C. Hall from Bernalillo County, Lincoln County Clerk Rhonda Burrows told county commissioners at their meeting Tuesday. Burrows serves as the county's representative on the NMAC board of directors and previous administered the county's medical indigent fund.

The NMAC directors met Saturday and reviewed more than 50 bills that have potential effect on counties, she said. They were aware that the state is projecting a budget shortfall for the next fiscal year of more than $200 million, she said. Burrows said a state gross receipts tax would be fairer instead of a disproportionate tax that would see counties such as Lea with oil and gas fields and a smaller population pay a high tax, but receive little in the way of Medicaid services while more heavily populated areas such as Bernalillo County would soak up the dollars.

"At the last minute (Hall) introduced the bill," she said. "The wording was vague but essentially requested the counties contribute additional tax money to Medicaid."

Lincoln County already imposes a 1/16th of a cent tax and a 1/12th for medical care. The county maintains a medical indigent fund and voters have approved a special property tax levy to help cover the cost of operating the county hospital, ambulance service and rural health clinics. She told commissioner they could easily show Lincoln County has done its share.

A fiscal analysis by the Legislative Finance Committee includes a chart that lists the growth of Medicaid in Lincoln County from December 2013 to December 2016 as 41.9 percent for a total of 8,149 people enrolled.

Most counties feel it is a very onerous amendment," Burrows said. "We know that the federal funding of (the Affordable Care Act) will continue to decline. We know some changes are coming, but the state's portion will be increasing. The proposal is to have counties increase another 1/16th which is building upon a bad program to begin with."

The state controls all facets of the Medicaid program except funding, for which New Mexico looks to the counties, she said. "It's not stationary amount, so it is not, 'If you give us this, we are good.'"

Burrows said the amendment creates disproportionate taxation.

"Typically, GRT is passed by county to benefit that county," she said. "With or without a referendum, (citizens) expect they are acting in their best interests to bring Medicaid services. But it doesn't work like that. Denser population areas don't pay their proportionate amount. Many believe there should be a statewide GRT. Then it would be imposed on all and the counties could get out of the business of trying to fix the state's budget."

While Burrows said she didn't think the bill had strong backing, things can change quickly, she warned.

Asking hospitals to reduce their draw-down on federal matching dollars, as some propose, would end up with those hospitals passing along the costs to patients, she said.

"That's not my favorite solution, but I think NMAC thinks it's better to have hospitals step up than dip into the counties again," she said.

State officials "are between a rock and a hard place to fill these budget gaps," Burrows said. "If this bill starts moving, we have to be ready to oppose it."

According to the fiscal analysis of the bill, the additional funding would be used to leverage federal Medicaid dollars for health care services in counties statewide. In Fiscal Year 2018, the $28.07 million for Medicaid would leverage an additional $72.9 million of federal funds for health care services and would support $101 million in health care services through Medicaid.

The analysis noted that since the Medicaid expansion occurred in 2014, enrollment has grown 46.5 percent in New Mexico and that the program relieved the burden on counties for providing indigent care for nearly 300,000 New Mexicans although county contributions remained the same.

The bill does not require counties to raise taxes, but if they do not, the money then must come from some other county source. Many counties have balances in their local indigent funds that have grown despite efforts to expand services, the analysis states.

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